12 Oct 2011

Expect more kiwi volatility, currency trader says

9:00 am on 12 October 2011

A foreign-exchange dealer says currency trading is expected to remain volatile, as money markets lack conviction and react wildly to developments in the eurozone debt crisis.

The kiwi shed nearly 13c after hitting a post-float high of 87.86 US cents in late July, as investors moved away from riskier currencies because of fears about the escalating eurozone debt crisis and slowing global growth.

But more positive news in recent weeks has helped the kiwi to recover some of that lost ground, and it's now buying 78.1 cents.

HiFX senior dealer Dan Bell expects the bumpy ride to continue because, he says, there has been no action to resolve the debt situation in Europe, despite the positive talk.